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AUD/USD Forex Technical Analysis – Short-Covering Rally Building; Trend Change Over .6774

James Hyerczyk

The Australian Dollar is trading higher on Tuesday. The currency has generally been in a downtrend since early September as weaker-than-expected economic indicators pointed to a need for more policy easing by the Reserve Bank.

However, the Aussie has moved up from recent lows, which dealers say is partly because some investors squared off positions before the U.S.-China trade talks and in response to weakening U.S. activity and a slowdown in the jobs market.

At 08:37 GMT, the AUD/USD is at .6752, up 0.0020 or +0.29%.

Daily AUD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6774 will change the main trend to up. A move through .6671 will signal a resumption of the downtrend.

The minor range is .6775 to .6671. Its 50% level or pivot at .6722 is potential support.

The main range is .6895 to .6671. If the trend changes to up then its retracement zone at .6783 to .6809 will become the primary upside target.

Daily Technical Forecast

Based on the early price action and the current price at .6752, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the uptrending Gann angle at .6751.

Bullish Scenario

A sustained move over .6751 will indicate the presence of buyers. If this move creates enough upside momentum then look for buyers to take a run at the main top at .6774. Taking out this top will likely lead to a test of the 50% level at .6783.

Bearish Scenario

A sustained move under .6751 will signal the presence of sellers. This could trigger a move into the minor 50% level at .6722, followed by an uptrending Gann angle at .6711.

Side Notes

The high immediately after last week’s RBA rate cut announcement and policy statement was .6775. I have to think that taking out this level will likely trigger a few buy stops. But be careful buying strength over this level because of the retracement zone at .6783 to .6809.

This article was originally posted on FX Empire

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